Q4 2023 INDUSTRIAL MARKET REPORT DALLAS/FORT WORTH
P ro p er t y : G a tewa y Crossing Logistics Ce nte r
w w w.h o l t l u n s fo rd .co m
TABLE OF CONTENTS
05
DFW Industrial Submarket Coverage
07
DFW Industrial Market Experts
08
DFW Trends & Transactions
09
DFW Industrial Facts & Figures
10
Submarket Intelligence
DALLAS 5950 Berkshire Lane, Suite 900 Dallas, Texas 75225 T 972.241.8300 | F 972.241.7955
FORT WORTH 1200 Summit Avenue, Suite 300 Fort Worth, Texas 76102 T 817.710.1110 | F 817.810.9017
www.holtlunsford.com
04 Q4 2023 DFW INDUSTRIAL MARKET REPORT
Q4 2023 DFW INDUSTRIAL MARKET REPORT 05
DFW INDUSTRIAL Submarket Coverage DECATUR
DENTON McKINNEY PONDER
PRINCETON
NORTHWEST DALLAS 7,194,737 SF
FARMERSVILLE FRISCO GREENVILLE
ALLEN JUSTIN
THE COLONY
BOYD
LEWISVILLE
PLANO
FLOWER MOUND
FAR NORTHEAST DALLAS 6,951,357 SF WYLIE
ROANOKE
HASLET
CARROLLTON
ROYSE CITY
SPRINGTOWN GRAPEVINE
KELLER
NORTH FORT WORTH 4,558,020 SF
ADDISON
COPPELL
RICHARDSON
SOUTHLAKE FARMERS BRANCH
GARLAND
DFW AIRPORT 2,257,984 SF
DFW INTERNATIONAL AIRPORT
ROCKWALL ROWLETT
LAS COLINAS
COLLEYVILLE SAGINAW
DALLAS LOVE FIELD AIRPORT
BEDFORD EULESS FORT WORTH MEACHAM INTERNATIONAL AIPRORT
RICHLAND HILLS
HURST IRVING
SOUTH STEMMONS 3,498,698 SF WHITE SETTLEMENT
SUNNYVALE
DALLAS
MESQUITE
FORT WORTH
NORTHEAST/EAST DALLAS 5,429,248 SF FORNEY
GRAND PRAIRIE
TERRELL
ARLINGTON
GREAT SW/ARLINGTON 3,759,054 SF
ALEDO
DALLAS EXECUTIVE AIRPORT
BENBROOK DUNCANVILLE
HUTCHINS
CRANDALL
CEDAR HILL
CRESSON
SOUTH FORT WORTH 5,855,746 SF
DESOTO
SOUTH DALLAS 8,720,435 SF
KAUFMAN
LANCASTER
MANSFIELD
BURELSON
RED OAK
MIDLOTHIAN
WAXAHACHIE
CLEBURNE ENNIS
Q4 2023 DFW INDUSTRIAL MARKET REPORT 07
DFW INDUSTRIAL Market Experts
JIM BRICE
MATT CARTHEY
CANON SHOULTS
JOHN GORMAN
JOSH BARNES
ANDREW GILBERT
Partner, Managing Principal Dallas jbrice@holtlunsford.com 972.280.8306
Partner, Managing Principal Fort Worth mcarthey@holtlunsford.com 817.710.1111
Managing Principal Dallas cshoults@holtlunsford.com 972.280.8328
Senior Vice President Dallas jgorman@holtlunsford.com 214.920.9800
Senior Vice President Dallas jbarnes@holtlunsford.com 972.280.8353
Vice President Dallas agilbert@holtlunsford.com 972.280.8312
GEORGE JENNINGS
THOMAS GRAFTON
MADDY CANTY
KEATON BRICE
BLAKE TROIANI
WILLIAM WILSON
MITCH CANTWELL
Vice President Fort Worth gjennings@holtlunsford.com 817.632.6151
Vice President Fort Worth tgrafton@holtlunsford.com 817.632.6152
Market Director Dallas mcanty@holtlunsford.com 972.280.8325
Market Director Dallas kbrice@holtlunsford.com 972.421.1956
Market Director Dallas btroiani@holtlunsford.com 972.280.0126
Market Associate Fort Worth wwilson@holtlunsford.com 817.284.5555
Market Associate Dallas mcantwell@holtlunsford.com 972.265.0133
TREY GOODSPEED
WALKER FLOYD
WESTON PORTER
JON SKIDMORE
DANNY PHILLIPS
LUKE FLOYD
GRAYSON FLEITZ
Market Associate Fort Worth tgoodspeed@holtlunsford.com 817.632.6155
Market Associate Dallas wfloyd@holtlunsford.com 972.265.0141
Market Associate Dallas wporter@holtlunsford.com 214.442.8933
Market Associate Dallas jskidmore@holtlunsford.com 214.442.8942
Market Analyst Dallas dphillips@holtlunsford.com 972.585.5102
Market Analyst Dallas lfloyd@holtlunsford.com 972.585.5109
Market Analyst Fort Worth gfleitz@holtlunsford.com 817.632.6159
08 Q4 2023 DFW INDUSTRIAL MARKET REPORT
HLC OUTLOOK The Dallas-Fort Worth industrial market concluded Q4 2023 with continued (but measured) growth and activity. Tenant demand for industrial space remained steady, fueled by the region’s strong economy and favorable business climate. Q4 2023 marked the 53rd consecutive quarter of positive net absorption. (more than 13 years!) Construction deliveries for 2023 reached a new high watermark of 68.2M SF (previous high was 39M SF in 2022). Consequently, the overall DFW direct vacancy rate increased to 7.5%. Construction starts have reduced dramatically due to the headwinds created by the capital markets, thus deliveries will sharply decline in subsequent quarters as the market settles toward a new equilibrium.
DFW INDUSTRIAL Trends & Transactions MARKET TRENDS
MARKET OBSERVATIONS •
•
With the recent changes in the debt markets, the development wave has slowed down. Continued tenant demand has helped counter this by giving developers confidence in increased rental rates. Fundamentals of what makes DFW appealing are unchanged. Population growth, lower cost of living, probusiness environment, central location and connectivity will continue to be attractive to businesses and capital markets.
•
Continued tenant demand is evident as shown by 53 consecutive quarters of positive net absorption.
Overall demand is balancing back to pre-covid levels of leasing activity and absorption. Absorption remained very strong through 2023 although down from 2021 and 2022 figures (48.5M SF and 38.2M SF respectively), the 2023 annual absorption totaled 33.9M SF.
•
Costs Stabilizing
•
Increased Demand from Foreign Companies and Manufacturers
Preleasing activity is still prevalent but concerns over delivery dates have increased due to the continued material shortages and delays. Such delays have encouraged many landlords to increase the amount of spec work including office, lights and levelers in a race to provide “operational” space for incoming prospective tenants.
•
Increased Attention On Workforce
− Shell construction and finish-out costs are beginning to stabilize.
− Where are they coming from? − Better work environment (Ex. HVAC Warehouse).
The rise of sublease space is a trend to be noted as we conclude 2023. Sublease space availability has reached an all time high of 1% (tempered against a historical average of 0.3% to 0.5%). Thus far, the availability has not had a meaningful impact on direct leasing / absorption as the majority of the available sublease space is offered as partial spaces or seasonally. As we enter 2024, we expect the overall industrial market to remain relatively stable. However, rent growth is expected to slow or stall in some pockets due to current vacancy from recent deliveries. Manufacturing tenants, foreign companies and 3PL users will continue to be among the key drivers of absorption, as the region’s strategic location and excellent transportation infrastructure attract businesses. Additionally, we expect the DFW region will outperform other parts of the country in 2024 as it continues to be the biggest benefactor of large-scale relocation efforts and population growth.
Q4 Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
6,997,660
9,196,455
12,422,715
Q4 Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
8.6%
7.8%
5.3%
Q4 Leasing Activity
vs. Prev. Qtr
vs. 12 Mths Ago
13,746,900
14,877,136
18,320,035
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
40,609,176
52,130,010
81,568,260
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
14,039,964
17,674,259
8,903,689
•
Sublease listings are on the rise and currently account for 1.0% of the overall reported vacancy.
•
With new deliveries to the market, tenants now have more options than they have for a while. A temporary increase in concessions is expected in some submarkets and/or size ranges.
•
Manufacturing requirements have increased steadily as companies look to onshore production
•
Rental Rate growth continues albeit more slowly, each individual submarket is performing differently.
TOP LEASE TRANSACTIONS •
Drinkpak has signed a 1,403,152 SF lease at Carter Park East with Clarion and Crow Holdings.
•
DrinkPak has signed a 1,250,743 SF lease at 35 – Eagle Building C with Trammell Crow Company.
•
Pepsi leased 515,792 SF from Prologis at 3636 Mountain Creek Parkway in Dallas, Texas, just north of I-20.
•
Kuka Furniture leased 504,500 SF from Prologis at 3584 Mountain Creek Parkway in Dallas, Texas, just north of I-20.
•
Alan Ritchey renewed a 450,340 SF lease at 4931 Conflans with Clarion Partners.
•
Vehicle Accessories has signed a 327,357 SF lease at 2700 E Scyene Road with Bental Green Oak.
•
Fruit of the Earth renewed a 277,200 SF lease at 3325 W Trinity Boulevard with LaSalle.
•
Network Logistics, Inc. signed a renewal on Airport ground lease at 1200 N 28th Avenue totaling 263,100 SF.
•
Eastern Trading purchased and is occupying 210,945 SF at 321 W. Centre Park Boulevard in DeSoto, Texas.
•
Consolidated Hospitality Supplies signed a 168,757 SF lease at Exeter’s Westpark III Development. This leaves 250K SF remaining in the building.
Q4 2023 DFW INDUSTRIAL MARKET REPORT 09
DFW INDUSTRIAL Facts & Figures OVERALL DFW
OVERALL VACANCY
10.0%
25,000,000
9.0%
OVERALL ABSORPTION
8.5%
8.0%
7.5%
8.0%
20,000,000
7.5%
6.9%
7.0% 6.0%
4.0%
7.0%
2.0%
5,000,000
1.0%
0.6%
1.0% 0.0%
0 Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
ABSORPTION
Q3 22
Q4 22
DELIVERIES
Q1 23
Q2 23
Q3 23
Q4 23
Q1 21
VACANCY
Q2 21
DIRECT
Q3 21
Q4 21
Q1 22
Q2 22
Q3 22
Q4 22
SUBLET
EXISTING INVENTORY SUBMARKET
2.0%
Q1 22
Q2 23
Q3 23
1.0%
30,000,000 20,000,000 10,000,000
Q1 21
Q2 21
Q3 21
Q4 21
TOTAL NET
TOTAL
40,000,000
0 Q4 20
Q4 23
50,000,000
5,000,000
0.0% Q4 20
60,000,000
10,000,000
3.0%
3.0%
70,000,000
15,000,000
4.0%
10,000,000
80,000,000
20,000,000
5.0%
5.0%
90,000,000
25,000,000
6.0%
15,000,000
OVERALL CONSTRUCTION
30,000,000
9.0%
Q1 22
Q2 22
Q3 22
Q4 22
Q1 22
Q2 23
Q3 23
0
Q4 23
Q4 20
LEASING ACTIVITY
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
DELIVERED
Q3 22
Q4 22
Q1 22
Q2 23
Q3 23
Q4 23
UNDER CONSTRUCTION
VACANCY
# BLDGS.
TOTAL RBA
DIRECT
SUBLET
TOTAL
YTD NET ABSORPTION
YTD DELIVERIES
UNDER CONSTRUCTION SF
YTD LEASING ACTIVITY
DFW Airport
1,030
98,620,503
6.9%
1.1%
8.1%
219,221
3,884,358
3,752,898
4,590,369
East Dallas
2,056
69,553,751
11.4%
0.6%
12.0%
4,174,789
5,800,489
7,461,882
5,825,790
Great SW/Arlington
1,971
129,683,993
4.5%
1.2%
5.6%
(94,562)
1,992,017
2,247,120
7,002,570
Henderson County
161
2,412,045
1.4%
0.0%
1.4%
34,351
7,601
0
29,254
North Fort Worth
1,548
142,074,611
9.6%
1.7%
11.3%
10,158,085
16,100,114
7,037,930
12,483,684
Northeast Dallas
3,231
128,887,988
4.2%
0.8%
5.0%
1,611,604
3,550,140
4,121,972
5,917,447
Northwest Dallas
2,387
132,450,043
6.3%
1.3%
7.6%
2,594,470
6,569,875
2,857,012
8,590,261
NW Dallas Outlying
259
4,491,286
7.6%
0.0%
7.6%
154,937
399,829
655,553
215,968
South Dallas
1,534
144,906,162
13.3%
0.7%
14.0%
11,865,981
23,283,772
7,059,212
9,614,753
South Fort Worth
3,207
101,429,741
6.7%
0.5%
7.1%
3,903,249
5,650,065
3,336,983
5,547,039
South Stemmons
4,734
139,238,871
5.6%
1.1%
6.7%
(634,924)
1,027,143
2,078,614
5,803,795
TOTALS
22,118
1,093,748,994
7.50%
1.00%
8.60%
33,987,201
68,265,403
40,609,176
65,620,930
SOURCE: COSTAR Q4 2023 INDUSTRIAL REPORT
10 Q4 2023 DFW INDUSTRIAL MARKET REPORT
SUBMARKET INTELLIGENCE
GSW/ARLINGTON
CURRENT EVENTS The Great Southwest (GSW) industrial submarket ended Q4 2023 with a slight decline in performance. However, the submarket as a whole remains in a very stable position. Per CoStar reporting in Q4, GSW ended 2023 with slight negative absorption of 94,562 SF. This is primarily due to the delivery of 1.9M SF of new projects during 2023. Additionally, GSW reported a total of 2.2M SF of new projects under construction at year end. Despite the Q4 negative absorption, the GSW Q4 vacancy rate was a very healthy 5.6%, increasing 0.7% from the Q3 reported vacancy rate of 4.9%. This maintains GSW’s ranking at second among the major submarkets with the lowest vacancy rates, behind only Northeast Dallas. Projecting forward as we enter 2024, we expect the GSW market to remain one of the top-performing submarkets. While measured, we forecast continued rent growth as tenant demand remains strong across the DFW market. Additionally, GSW remains one of the tightest submarkets for bulk spaces above 200K SF.
Q4 Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
387,054
(550,166)
778,401
Q4 Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
5.6%
4.9%
3.5%
Q4 Leasing Activity
vs. Prev. Qtr
vs. 12 Mths Ago
1,909,581
1,608,413
1,288,517
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
2,247,120
2,890,898
2,610,107
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
764,348
67,921
49,288
TOP LEASE TRANSACTIONS
MADDY CANTY
Managing Principal cshoults@holtlunsford.com 972.280.8328
Market Director mcanty@holtlunsford.com 972.280.8325
2,000,000
5.0%
1,500,000
4.0%
1,000,000
3.0%
500,000
2.0%
0
1.0%
-500,000
0.0%
-1,000,000 Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
ABSORPTION
Q2 22
Q3 22
Q4 22
Q1 23
DELIVERIES
Q2 23
Q3 23
Q4 23
VACANCY
NEW DEVELOPMENTS
Fruit of the Earth renewed a 277,200 SF lease at 3325 W Trinity Boulevard with LaSalle.
•
Prologis Interchange 20 – a 742,543 SF four (4) building spec development with Prologis
•
Fidelity Paper signed a 107,082 SF lease at 310 SW 14th Street with Heller Industrial Park.
•
Commerce Center 161 – a 105,072 SF four (4) building spec development with Hopewell/MBK Partners
•
Alan Ritchey renewed a 450,340 SF lease at 4931 Conflans with Clarion Partners.
•
GSW Commerce Center at 161 – a 464,495 SF two (2) building spec development with Molto
•
Lonestar Electric signed an 82,935 SF lease at 804 W. Shady Grove with Bridge Logistics Properties.
•
•
Regency Technologies renewed a 117,025 SF lease at 2501 N GSW Parkway with Prologis.
Wildlife Commerce Park | Wildlife 14 & 15 – two (2) building spec development with Crow Holdings Industrial totaling 228,121 SF and 305,640 SF
•
1200 Oakdale Road – a 70,050 SF spec development with Alluz Capital.
•
360 Crossing @ Red Hawk | 2617 S Hwy 360 – a 214,801 SF spec development with Ironwood and Affinius Capital
•
CANON SHOULTS
2,500,000
6.0%
•
DEALS IN THE MARKET
EXPERTS
VITAL STATS 7.0%
DFW Last-Mile Logistics Portfolio - Leon Capital Group is selling a multi-building 461,182 SF portfolio with two (2) assets in the GSW submarket.
LARGE EXISTING VACANCIES •
2250 Lion Country Parkway | Wildlife 2 – 172,200 SF
•
1600 S Great Southwest Parkway – 298,506 SF
•
410 W Trinity Boulevard | Prologis GSW 48 – 262,854 SF
•
3580 N Hwy 161 | Building 1 – 252,555 SF
•
3050 Red Hawk Drive | 360 Crossing @ Red Hawk - 214,801 SF
•
502 Fountain Parkway – 214,684 SF
SUBMARKET INTELLIGENCE
Q4 2023 DFW INDUSTRIAL MARKET REPORT 11
DFW AIRPORT
CURRENT EVENTS
Q4 Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(665,833)
374,232
(179,068)
Q4 Vacancy
vs. Prev. Qtr
8.1%
VITAL STATS 10.0%
4,000,000
9.0%
3,500,000
vs. 12 Mths Ago
8.0%
3,000,000
6.5%
4.6%
7.0%
2,500,000
6.0%
2,000,000
Q4 Leasing Activity
vs. Prev. Qtr
vs. 12 Mths Ago
5.0%
1,500,000
461,013
1,286,052
1,170,985
4.0%
1,000,000
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
3.0%
500,000
2.0%
0
3,752,898
3,446,894
4,773,308
1.0%
-500,000
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
630,836
727,289
858,895
TOP LEASE TRANSACTIONS •
Network Logistics, Inc. signed a renewal on Airport ground lease at 1200 N 28th Avenue totaling 263,100 SF.
•
Fresenius USA signed a 130,240 SF renewal with Prologis at 5201 Regent Boulevard in Irving.
•
Cynergy renewed their lease with LaSalle at 4055 Corporate Drive in Grapevine totaling 96,548 SF.
0.0%
•
Skyway Logistics Center – Box Investment Group sold their freestanding 84,000 SF development to an undisclosed user out of CA at building delivery.
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
Q3 22
Q4 22
DELIVERIES
Q1 23
Q2 23
Q3 23
Q4 23
VACANCY
NEW DEVELOPMENTS •
DFW Logistics Hub – a 1.5M SF three (3) building project developed by Weber & Company and Gruene Real Estate located on Airport land, set for delivery in Q4 2023
•
DFW Walnut Hill – HLCI is wrapping up their freestanding 145K SF building located at Passport Park on Airport land, set to deliver in January. This building has been pre-leased.
•
Mustang Court – Brookfield is finalizing their three (3) building development in Southlake, totaling 335,401 SF, set for delivery in Q1 2024.
•
DFW Commerce Center, Bldg 5 – CLX is developing their next phase at Passport Park which is a 509,668 SF building which is set for delivery in Q2 2024.
•
Genesis 121 – Freestanding 182,983 SF rear loader on Highway 121 in Grapevine developed by Bridge Logistics Properties. Set to deliver in Q1 2024.
•
Edmonds 121 Interchange – Box Investment Group has broken ground on their freestanding 50,125 SF building at 121 Business and Edmonds in Lewisville. Set to deliver in August 2024.
•
Park West Crossing – ML Realty is developing their next phase at Park West. Two buildings totaling 205K SF set for delivery in Q2 2024.
HLC DEAL
TOP SALE TRANSACTIONS Lakeside Commerce Center Portfolio – Stockbridge sold four (4) buildings totaling 345K SF on Lakeside Parkway just north of Highway 121 in Flower Mound. The sale was part of a larger portfolio across the market.
Q1 21
ABSORPTION
HLC DEAL
•
-1,000,000 Q4 20
HLC DEAL
The Dallas-Fort Worth (DFW) Airport industrial submarket finished Q4 2023 with an 8.1% vacancy rate. That is an uptick compared to the 6.5% vacancy rate at the end of Q3 due to new delivered product at Passport Park, Highway 114 and State Highway 121, which will likely be leased in the next 6 - 9 months. The sweet spot size range remains in the 200K - 500K SF size range as there are only a few options readily available in that size at the Airport. In addition, the shallow bay leasing remains extremely active and strong without much downtime. The bulk warehouse rental rates are increasing into the $7.75 - $8.50 range, dependent on building age. In the 50K to 100K SF range, for functional shallow bay product, we are seeing rates from $10.50 to $12.50, depending on the age. Rental abatements are still prevalent depending on renewal versus new deals and the size of the lease transaction. DFW International Airport is ranked as one of the largest cargo airports in the country. It boasts a high proportion of newer buildings since 2000, and as a result, the submarket has a high concentration of efficient product with clear heights and dock configurations suitable for modern distribution. The submarket consists of large big-box users, including Amazon, Uline, PPG, Bed Bath & Beyond, McKesson and many others.
EXPERTS ANDREW GILBERT
KEATON BRICE
Vice President agilbert@holtlunsford.com 972.280.8312
Market Director kbrice@holtlunsford.com 972.421.1956
12 Q4 2023 DFW INDUSTRIAL MARKET REPORT
SUBMARKET INTELLIGENCE
EAST DALLAS
CURRENT EVENTS East Dallas finished 2023 with 4.1M SF positive absorption. We expect this trend to continue as construction starts have slowed down considerably and leasing activity is steady. There is still 7.4M SF under construction, so we expect vacancy rates to be up/down as leases commence and buildings deliver. This construction activity spans a very large SF range, so as you micro analyze any opportunity moving forward, each size range will tell a different story. It is important to understand that the East Dallas submarket consists of three distinctly different micromarkets, Central East Dallas, East Dallas/Mesquite and Forney/Terrell. The data must be examined closely to see their difference. Central East Dallas includes primarily older buildings on the outskirts of Dallas’ CBD. It should also be noted that the overall availability rate for this micro-market is currently only 5.1%. The broader view by those focused on institutional-grade industrial projects should not be influenced too heavily by this micro-market. Much of it has been previously redeveloped or is planning to be redeveloped as opposed to new industrial development. Crow Holdings does have a proposed project on the far east side of this pocket, which will compete more with the East Dallas/Mesquite submarket. East Dallas/Mesquite continues to be the backbone of the overall East Dallas submarket. While reporting a micro market vacancy rate of 8.0%, it should be noted it has already dropped to 7.2% in January. Tenant demand has remained steady although dropping from peak levels. Forney/Terrell is still the main point of conversation within the East Dallas submarket due largely to the amount of spec development underway. The Forney/Terrell micro market has a vacancy rate of 12.4%, consisting mostly of Exeter’s two (2) 500K SF buildings and the Cart.com sublease. As large vacancies in Mesquite continue to get absorbed, bulk users will be forced to look further east, leaving Forney in a great spot to take on the next big wave of leasing activity. Tenants certainly have more options as new projects deliver and as a result, landlords are competing harder for each deal. Rates are expected to hold through this lease up phase, however concessions are likely to increase for the short term.
EXPERTS BLAKE TROIANI
Senior Vice President jbarnes@holtlunsford.com 972.280.8353
Market Director btroiani@holtlunsford.com 972.280.0126
vs. Prev. Qtr
vs. 12 Mths Ago
707,719
2,124,374
1,737,434
Q4 Vacancy
vs. Prev. Qtr
12.0%
11.0%
VITAL STATS
vs. 12 Mths Ago 9.9%
Q4 Leasing Activity
vs. Prev. Qtr
vs. 12 Mths Ago
677,260
1,316,567
2,082,008
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
7,461,882
9,156,697
9,460,793
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,694,815
1,069,947
344,637
TOP LEASE TRANSACTIONS
14.0%
2,500,000
12.0%
2,000,000
10.0%
1,500,000
8.0%
1,000,000
6.0%
500,000
4.0%
0
2.0%
-500,000
0.0%
-1,000,000 Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
ABSORPTION
Q3 22
Q4 22
Q1 23
DELIVERIES
Q2 23
Q3 23
Q4 23
VACANCY
•
•
Vehicle Accessories has signed a 327,357 SF lease at 2700 E Scyene Road with Bental Green Oak.
Landmark Sunnyvale – a 316,297 SF building in Mesquite with Landmark Companies
•
•
General Dynamics has signed a 156,144 SF lease at 19800 IH 635 - Bldg B with LGE Design Build/Creation Equity.
Mesquite Airport Logistics Center | Phase II – a 1.3M SF three (3) building project in Mesquite with Dalfen
•
•
General Dynamics has signed a 103,978 SF lease at 19800 IH 635 - Bldg C with LGE Design Build/Creation Equity.
Town East Junction 540 – a 193,800 SF building in Mesquite with Leon Capital
•
•
SRS Distribution has signed a 78,854 SF lease at 100 N Sam Houston with Cone Commercial.
Sunnyvale Crossing – a 180,440 SF building in Sunnyvale with Stonelake
LARGE EXISTING VACANCIES DEALS IN THE MARKET • •
•
12955 FM 2932 – 1,009,530 SF
Peachtree Distribution Center – a 396,750 SF building with Dalfen Industrial located in Mesquite.
•
13991 US Hwy 80 – 509,047 SF
•
13871 US Hwy 80 – 500,063 SF
Mesquite Airport Logistics Center – a 1,003,100 SF (two) building project with Dalfen Industrial located in Mesquite.
•
301 Apache Trail – 294,899 SF (Sublease)
•
12955 FM 2932 – 293,548 SF
•
1204 Military Parkway – 241,512 SF
•
5151 Samuell Boulevard – 211,234 SF (Sublease)
•
2614 Big Town Boulevard – 211,112 SF
•
13871 US Hwy 80 – 182,996 SF
•
1475 Republic Parkway – 177,473 SF (Sublease)
•
510 N Peachtree Road - 144,750 SF (Sublease)
•
4401 Samuell Boulevard – 143,801 SF
•
5320 S Peachtree Road – 137,537 SF
•
1201 Big Town Boulevard – 137,500 SF
•
1204 Military Parkway – 117,260 SF
NEW DEVELOPMENTS •
•
•
JOSH BARNES
Q4 Absorption
Gateway Crossing Logistics Park – a 1,762,886 SF three (3) building project in Forney with Principal and Holt Lunsford Commercial Investments (a 1,024,549 SF cross-dock, a 473,397 SF cross-dock, and a 264,940 SF cross-dock) Innovation Ridge Logistics Park – a 1,137,650 SF three (3) building project in Forney with Lovett (a 817,538 SF cross dock, a 175,092 SF front load, and a 145,020 SF front load) Platform 80/20 – a 942,659 SF two (2) building project in Forney with Intrepid Equity (a 512,223 SF cross-dock and a 430,436 SF cross-dock)
SUBMARKET INTELLIGENCE
Q4 2023 DFW INDUSTRIAL MARKET REPORT 13
NORTHEAST DALLAS Q4 Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
89,796
176,792
1,746,377
CURRENT EVENTS VITAL STATS 8.0%
Q4 Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
5.0%
4.1%
3.2%
5.0%
Q4 Leasing Activity
vs. Prev. Qtr
vs. 12 Mths Ago
4.0%
2,500,000
6.0%
1,553,507
917,963
1,890,855
3.0%
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
2.0%
4,121,972
4,506,465
4,730,048
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,089,831
515,743
1,359,297
TOP LEASE TRANSACTIONS
3,000,000
7.0%
2,000,000 1,500,000 1,000,000 500,000
1.0% 0.0%
0 Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
ABSORPTION
Q3 22
Q4 22
Q1 23
Q2 23
DELIVERIES
Q3 23
Q4 23
•
Device Services Group has signed a 150,898 SF lease at 350 Cypress Hill Drive with AC Industrial Properties.
121 Technology Park – a 370,860 SF four (4) building spec project in Allen with Stillwater Capital
•
•
DisplayIt has signed a 123,500 SF lease at 1911 FM 546 with Greystar.
M-75 Commerce Center – a 304,576 SF spec building in McKinney with CA Ventures
•
•
First Place Foods has signed a 69,780 SF lease at 751 S International Drive with Cohen Asset Management.
Centerville Commerce Center – a 150,926 SF spec building in Garland with Leon Capital
•
Lookout Logistics Center – a 102,273 SF spec building in Richardson with Crow Holdings Industrial
•
Stealth Finishing, LLC has signed a 57,319 SF lease at 9660 Dilworth Road with ML Realty.
•
•
Cinno, Inc has signed a 55,000 SF lease at 2040 Redbud Boulevard with Dalfen Industrial.
Star Commerce Center V – a 76,480 SF spec building in Frisco with Blue Star Land
•
•
Lonestar Electric has signed a 54,860 SF lease at 2120 Central Circle with Stonelake.
260 E Exchange Parkway – a 50,864 SF spec building in Allen with Gillett Commercial.
•
McNichols has signed a 52,500 SF lease at 3540 W Miller Road with Link.
•
910 10th Street – 328,704 SF
•
Southern Star has signed a 47,865 SF lease at 2801 Technology Drive with Mapletree.
•
12791 International Parkway – 183,764 SF
DAC Vision has signed a 47,006 SF lease at 3630 W Miller Rd with Link.
•
1475 Republic Parkway – 177,473 SF (Sublease)
•
Harry McKillop Boulevard – 165,864 SF
•
2701-2805 S Shiloh Road – 164,656 SF
•
1501 Kings Road – 154,923 SF
Plano Industrial Portfolio – a 707,668 SF seven (7) building portfolio owned by Link Logistics
•
1411 E Lookout Drive – 138,003 SF
•
2600 McCree Road – 132,600 SF
Richardson Light Industrial Portfolio – a 102,944 three (3) building portfolio owned by CIP Real Estate
•
12019-12097 Corporate Drive – 120,445 SF
•
1405 E Lookout Drive – 118,893 SF
•
12790 International Parkway – 113,864 SF
•
12002 Corporate Drive – 111,084 SF
•
10401 Miller Road – 108,490 SF
•
1125 E Collins Boulevard – 100,354 SF
HLC DEAL
•
HLC DEAL
DEALS IN THE MARKET • •
NEW DEVELOPMENTS •
Frisco Trade Center – a 576,368 SF three (3) building spec project in Frisco with Dalfen
•
McKinney Logistics Park – a 525,636 SF three (3) building spec project in McKinney with Becknell Industrial
It is important to note that Northeast Dallas consists of three primary areas that are unique in their tenant base, maturity and overall landscape. Each micro-market must be examined separately as it is rare to see tenants consider space from one to the next. NE Dallas/Garland, Plano/ Richardson, and Allen/McKinney/Frisco all boast unique strengths that make them viable for a diverse tenant base.
VACANCY
•
HLC DEAL
The Northeast Dallas submarket finished 2023 with an overall vacancy rate of 5.0%, making it the lowest vacancy rate amongst all other submarkets in DFW. The total year posted 1.6M of positive absorption however it was still not enough to keep the vacancy rate from rising. This is primarily due to the deliveries that took place in the Allen/ McKinney/Frisco micro market which is seeing good leasing activity post delivery. The one thing everyone should continue to monitor is subleasing activity as that could directly affect rent growth and absorption.
LARGE EXISTING VACANCIES
NE Dallas/Garland is the oldest and most mature micromarket consisting of supply chain companies as well as manufacturing. Vacancy has increased slightly as new projects have been delivered and more has been posted to the market for sublease, although it is still only 3.9% from an all time low of 1.6% mid 2022. The last few sites are currently under construction and the focus has shifted to covered land plays and redevelopment. With close proximity to the core population of DFW, rental rate growth is still expected here as it has not quite reached the marks of other comparable submarkets such as Valwood and South Stemmons. Plano/Richardson has certainly continued to experience an identity shift as it no longer relies solely on the tech industry. As DFW has grown, this area has transformed and attracted a more diverse tenant base focused on fulfilling supply chain needs while still remaining attractive to tech companies because of the proximity to skilled labor. A 5.7% vacancy rate remains steady from the previous quarter and a historic low of 5.1% mid 2022. This vacancy consists primarily of specialized flex space and the majority of leasing activity is focused on the few new developments in the area. New projects being delivered 1Q 2023 might cause this to increase slightly but there is good leasing activity expected to fill it up soon. Allen/McKinney/Frisco is the newest micro-market and is seeing the most development activity due to the availability of land. With 2.5M SF under construction from Frisco to McKinney, development is slightly outpacing demand, however with recent leasing activity, we expect these new developments to lease up at a steady pace as they begin to deliver. Vacancy increased slightly to 5.8% with the majority of that change coming from sublease vacancy being posted.
EXPERTS JOSH BARNES
BLAKE TROIANI
Senior Vice President jbarnes@holtlunsford.com 972.280.8353
Market Director btroiani@holtlunsford.com 972.280.0126
14 Q4 2023 DFW INDUSTRIAL MARKET REPORT
SUBMARKET INTELLIGENCE
NORTHWEST DALLAS
CURRENT EVENTS Through Q4 2023, the Northwest Dallas industrial submarket continues to be one of the strongest-performing submarkets in DFW. Valwood is a haven for building supply companies including Trane, Carrier, Shearer Supply, Goodman, Huttig as well as a haven for 3PL’s requiring direct access to I-35. Billingsley, Longpoint, Panattoni, and TA Realty have leased their recent developments in Valwood. The Metropolitan/Addison submarket is extremely tight from a vacancy standpoint as there are no more available sites for development. Lastly, as developers move north to track down sites in Denton and Sanger, Highway 121 is now centrally located in the DFW market and an extremely desirable location for users. The Northwest Dallas submarket finished Q4 with a 7.6% vacancy rate, which is higher than last quarter due to recent spaces of more than 100K SF becoming available in NW Dallas. Poly Air, Lennox and Tuesday Morning have all vacated spaces more than 100K SF and the vacancy rate will decrease when the big blocks of space become leased, which we expect downtime to be nominal. The NW Dallas absorption numbers totaled a positive 1.2M SF in Q4 due to Consolidated Hospitality Supplies and Interlake Mecalux signing large deals in Denton.
vs. Prev. Qtr
vs. 12 Mths Ago
1,264,690
(883,434)
1,016,182
Q4 Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
7.6%
7.1%
4.0%
5.0%
Q4 Leasing Activity
vs. Prev. Qtr
vs. 12 Mths Ago
4.0%
2,037,533
855,070
2,502,746
3.0%
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
2.0%
2,857,012
4,774,123
7,327,008
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
2,133,768
923,509
480,499
TOP LEASE TRANSACTIONS •
Interlake Mecalux signed a 250K SF lease at Billingsley’s Denton development at I-35 and Highway 380.
•
Consolidated Hospitality Supplies signed a 168,757 SF lease at Exeter’s Westpark III Development. This leaves 250K SF remaining in the building.
•
Big D Party Rentals signed a 72K SF renewal at 3237 Commander Drive in Carrollton.
•
St Charles Trading signed a 60K SF lease at Billingsley’s Denton development at I-35 and Highway 380.
•
TTR Shipping signed a 50K SF lease at 2727 Realty with Investcorp in Carrollton.
•
WineDirect signed a 50K SF lease at 4455 Simonton Road with AEW in Farmers Branch.
HLC DEAL
HLC DEAL
DEALS IN THE MARKET •
AEW Portfolio – AEW is selling three (3) projects in NW Dallas totaling more than 600K SF. The assets are currently 100% leased and suite sizes range from 15K - 170K SF.
•
DFW Shallow Bay Portfolio – Birtcher Anderson is selling their portfolio with assets located in South Stemmons and in NW Dallas. These assets provide suite sizes ranging from 3K - 15K SF.
HLC DEAL
HLC DEAL
EXPERTS ANDREW GILBERT
KEATON BRICE
Vice President agilbert@holtlunsford.com 972.280.8312
Market Director kbrice@holtlunsford.com 972.421.1956
VITAL STATS
Q4 Absorption
8.0%
3,000,000
7.0%
2,500,000 2,000,000
6.0%
1,500,000 1,000,000 500,000 0 -500,000
1.0%
-1,000,000
0.0%
-1,500,000 Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
ABSORPTION
Q2 22
Q3 22
Q4 22
DELIVERIES
Q1 23
Q2 23
Q3 23
Q4 23
VACANCY
NEW DEVELOPMENTS •
ICC-35 – a 1.1M SF three (3) building project with CLX Ventures located directly off of Loop 288 and I-35 in Denton, set for completion Q1 2024
•
3333 University Drive – Billingsley is under construction on a two (2) building project in Denton totaling nearly 900K SF, set for completion in Q1 2024
•
Mayhill 380 Business Park – a 260K SF three (3) building project in Denton located on the SEC of Loop 288 and 380 with Velocis, set for completion in Q2 2024
•
Denton Logistics Center – Brookfield is breaking ground on their freestanding 270K SF development in Denton. Set to deliver Q3 2024.
HLC DEAL
HLC DEAL
SUBMARKET INTELLIGENCE
Q4 2023 DFW INDUSTRIAL MARKET REPORT 15
SOUTH DALLAS
CURRENT EVENTS
Q4 Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
1,615,535
5,414,616
2,489,409
Q4 Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
VITAL STATS 16.0%
14.0%
13.9%
6.9%
vs. Prev. Qtr
vs. 12 Mths Ago
8.0%
2,737,499
1,603,124
3,328,566
6.0%
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
4.0%
26,235,126
2.0%
8,382,426
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,862,939
7,840,883
2,312,880
TOP LEASE TRANSACTIONS
8,000,000
12.0%
Q4 Leasing Activity
7,059,212
10,000,000
14.0%
6,000,000
10.0%
4,000,000 2,000,000 0
0.0%
-2,000,000 Q4 20
Q1 21
Q2 21
Q3 21
ABSORPTION
Q4 21
Q1 22
Q2 22
Q3 22
Q4 22
DELIVERIES
Q1 23
Q2 23
Q3 23
Q4 23
VACANCY
LARGE EXISTING VACANCIES
•
Nina Footwear leased 125,299 SF from Affinius Capital at 1309 E Cleveland Road in Hutchins, Texas.
•
1301 Southport Parkway (Bld 1) for 1,095,360 SF with XEBEC in Wilmer, Texas (new construction)
•
NTB leased 158,633 SF from Johnson Development at 2201 E Longhorn Drive in Lancaster, Texas, just east of I-35E and south of I-20.
•
3486 Cedardale Road – 1,084,460 SF spec development by Trammell Crow (new construction)
•
Eastern Trading purchased and is occupying 210,945 SF at 321 W. Centre Park Boulevard in DeSoto, Texas.
•
1401-1501 E Pleasant Run Road – 1,027,068 SF spec with TRG/Grandview Partners in Wilmer TX (new construction)
•
Logistics + leased 489,907 SF from Xebec at 1300 E. Fulghum Road in Wilmer, Texas off I-45.
•
950 N Interstate 45 – 1,013,833 SF spec development by Majestic Realty Company (new construction)
•
Kuka Furniture leased 504,500 SF from Prologis at 3584 Mountain Creek Parkway in Dallas, Texas, just north of I-20.
•
4235 Singleton Boulevard – 1,005,200 SF with LOVETT Commercial (new construction)
•
Pepsi leased 515,792 SF from Prologis at 3636 Mountain Creek Parkway in Dallas, Texas, just north of I-20.
•
3800 Railport Parkway – 852,987 SF with Malouf in Midlothian, Texas (2nd generation)
NEW DEVELOPMENTS •
1200 N Sunrise Road – 1,351,372 SF spec development (LEASED) by Champion Partners with Cresset Partners
•
1900 Southport Parkway – 746,420 SF spec with Bandera Ventures in Wilmer, Texas
•
1701 E Pleasant Run Road – 744,452 SF spec with Bandera Ventures in Wilmer, Texas
•
800 Cottonwood Valley Road – 565,600 SF spec with Stonemont in Wilmer, Texas
•
300 W. Wintergreen Road – 560,030 SF spec with IAC Properties in Hutchins, Texas
The overall South Dallas Industrial submarket, as surveyed, encompasses I-30 west of downtown, I-20, and I-45, totaling approximately 179M SF. According to the survey area, CoStar reported a positive Net Absorption of 1,396,416 SF for South Dallas in Q4 2023. Despite the positive Leasing Activity, this combined sector of the industrial market is now 13.3% vacant, which is 0.2% higher than the previous report in Q3 2023. This increase is primarily due to deliveries outpacing leasing activity. In Q4, South Dallas saw the delivery of another 1.9M SF and still has 8.6M SF remaining under construction. Although facing a rising vacancy rate in this submarket, South Dallas had YTD Net Absorption of 11,176,974 SF, representing 33.0% of the 33,918,810 SF overall YTD Net Absorption in the DFW Industrial Market. Between 2020, 2021, and 2022, the South Dallas submarket of I-30, I-20, and I-45 enjoyed an average single-digit vacancy rate of 5.98%. However, the rapid pace of numerous construction projects and deliveries flooded this submarket with inventory in 2023. Deliveries have outpaced tenant demand in the changing macro-economic environment, subsequently eroding the previously enjoyed single-digit vacancy along I-20 and I-45. Please note: CoStar’s South Dallas boundaries do not include the west Dallas I-30 corridor. As such, their data in the charts will vary.
EXPERTS JOHN GORMAN
CANON SHOULTS
Senior Vice President jgorman@holtlunsford.com 214.920.9800
Managing Principal cshoults@holtlunsford.com 972.280.8328
MITCH CANTWELL Market Associate mcantwell@holtlunsford.com 972.265.0133
16 Q4 2023 DFW INDUSTRIAL MARKET REPORT
SUBMARKET INTELLIGENCE
SOUTH STEMMONS
CURRENT EVENTS The outlook for South Stemmons remains positive as we head into 2024. Per Costar reporting, leasing activity was a positive 1.5M SF, while absorption was down 682,962 SF. South Stemmons ended the quarter with 5.6% direct vacancy, ranking it as one of the top 3 submarkets within the DFW metroplex. Rental rates and price per SF continue to rise due to the low vacancy and the submarket’s infill location. South Stemmons, historically known as a user-owned market, has become primarily institutionally owned, which in turn has improved the tenant offerings in the market and helped drive rental rate increases. For tenants looking in the market, location has continued to outweigh functionality due to the close proximity to Dallas CBD, the Medical District, and immediate access to thriving Dallas suburbs.
vs. Prev. Qtr
vs. 12 Mths Ago
(682,962)
(177,637)
11,380
Q4 Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
6.7%
6.0%
4.8%
5.0%
Q4 Leasing Activity
vs. Prev. Qtr
vs. 12 Mths Ago
4.0%
1,498,227
745,512
1,612,536
3.0%
vs. Prev. Qtr
vs. 12 Mths Ago
2,135,614
1,655,271
1.0%
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
57,000
20,000
1,227,594
SOW Good signed a 51,264 SF lease at 304-308 W Mockingbird with Prologis
•
Preziosa Stone signed a 23,874 SF lease at 3200 Irving Boulevard (Proto Park) with M2G Ventures.
•
Reinhardt Fabrication signed a 22,402 SF lease at 9224 King Arthur with Stonelake.
•
Galleria Farms signed a 20K SF lease at 3148 Quebec with Olerio Homes.
•
Phillips May renewed their 18K SF lease at 1125 Longpoint Avenue with Hines.
HLC DEAL
DEALS IN THE MARKET
•
CANON SHOULTS
MADDY CANTY
Managing Principal cshoults@holtlunsford.com 972.280.8328
Market Director mcanty@holtlunsford.com 972.280.8325
Dalfen has their Sunbelt portfolio on the market with one (1) building in West Brookhollow – 2040 Century Center Blvd (170K SF) Leon Capital has a portfolio on the market (DFW Last-Mile Logistics Portfolio) with two (2) buildings in West Brookhollow – 8888 Governors Row (61,406 SF) and 8816-8820 Directors Row (37,406 SF)
1,000,000
6.0%
2,078,614
•
1,500,000
7.0%
Q4 U/C SF
TOP LEASE TRANSACTIONS
•
8.0%
2.0%
HLC DEAL
EXPERTS
VITAL STATS
Q4 Absorption
500,000
0
-500,000
0.0%
-1,000,000 Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
ABSORPTION
Q2 22
Q3 22
Q4 22
Q1 23
Q2 23
DELIVERIES
Q3 23
Q4 23
VACANCY
NEW DEVELOPMENTS •
Core 35 Phase IV – 11124 Goodnight Lane – Building A – a 289,564 SF building under construction with Crow Holdings Industrial
•
Core 35 Phase IV – 11110 Goodnight Lane – Building B – a 142,466 SF building under construction with Crow Holdings Industrial
•
Trinity Industrial Park | Building A – a 39,774 SF development with GTC Real Estate Investments
•
Trinity Industrial Park | Building B – a 42,999 SF development with GTC Real Estate Investments
LARGE EXISTING VACANCIES •
8611 Ambassador Row – 100K SF
•
5017-5199 Pulaski Street – 79,577 SF
•
8107 Chancellor Row – 74K SF
•
1715 Market Center Boulevard – 71,562 SF
•
10614-10676 King William Drive – 65,243 SF
•
1608 Plantation Road – 67,575 SF
•
201 Regal Row – 59,970 SF
SUBMARKET INTELLIGENCE
Q4 2023 DFW INDUSTRIAL MARKET REPORT 17
NORTH FORT WORTH Q4 Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
3,173,852
2,187,820
2,906,193
Q4 Vacancy
vs. Prev. Qtr
11.3%
10.2%
6.9%
vs. Prev. Qtr
vs. 12 Mths Ago
1,613,989
3,808,580
2,949,115
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
7,037,930
11,461,463
18,792,907
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
4,423,533
5,063,111
2,016,334
TOP LEASE TRANSACTIONS
•
HLC DEAL
4,000,000
8.0% 3,000,000 6.0% 2,000,000
4.0%
1,000,000
2.0% 0.0%
0 Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
ABSORPTION
Q2 22
Q3 22
Q1 23
Q2 23
DELIVERIES
Q3 23
Q4 23
LARGE EXISTING VACANCIES 114 Logistics Park – 1,004,400 SF
•
Northlake Logistics Crossing | Building 1 – 985,800 SF
•
Sylvania Crossing @ I-35W | Building 2 – 699,246 SF
•
Northlake 35 I Building 2 – 634,744 SF
•
Alliance Center North I Building 4 – 615,694 SF
•
Westport 20 – 562,500 SF
•
Westport Parkway Commerce Center – 400,565 SF
•
Northlake Business Center – 394,958 SF
•
Synergy Crossing I 390,440 SF
•
Intermodal Logistics Center I Building 5 – 386,250 SF
•
Speedway Logistics Crossing I Building 3 – 384,716 SF
35 Eagle – a 2,125,159 SF five (5) building project with Clarion.
•
Northwest Commerce Park I Building 3 – 351,194 SF
•
Northlake 35 I Building 3 – 346,322 SF
Mercantile Logistics Station – a 850,500 SF two (2) building project with Velocis.
•
Cowtown Crossing | Building 3 – 304,665 SF
Blazing Trail – a 657,562 SF four (4) building project with USAA.
•
Alliance Gateway 50 – 287,242 SF
•
Elizabeth Creek Gateway | Building D – 286,467 SF
•
11401 Harmon Road – 284,238 SF
•
Alliance Gateway 14 I 250,782 SF
Saginaw Distribution Center – a 321,193 SF building.
NEW DEVELOPMENTS
•
Alliance Center East – a 449,232 SF two (2) building project with Hillwood.
•
Basswood 35 – a 349,660 SF three (3) building project with Eastgroup Properties.
•
Alliance Gateway 62 – 245K SF
•
Champions Crossing – 215,128 SF
West GSW Logistics Crossing - Building A - a 154,588 SF project with Scannell Properties.
•
Northlink | Building C – 211,037 SF
The North Fort Worth submarket finished Q4 2023 off strong by posting a positive net absorption of 2.4M SF - bringing the overall absorption to 8.8M SF for the calendar year. For historical perspective, this total absorption is only slightly below the 2022 posting of 9.2M SF but still above the 2021 figure of 8M SF. Of further note, since Q1 2021, North Fort Worth has only posted a quarterly positive absorption figure less than 2M SF four separate times with the lowest of those posting being just below 1M SF. Every other quarter within that time frame has surpassed 2M SF. Concurrently, the submarket also posted yet another impressive Leasing Activity figure of 12.2M SF for the calendar year, following an all time market high of 14M SF in 2022.
VACANCY
Big Ass Fans has signed a 221,444 SF lease at Fort West Building A with Creation Equity.
DEALS IN THE MARKET
•
Q4 22
Northlake 35 | Building 1 – 1,049,022 SF
Hohmann & Barnard, Inc has signed a 95,500 SF lease at 5600 Stratum Drive with ML Realty.
•
5,000,000
10.0%
•
•
•
6,000,000
•
CHEP USA has signed a 155,200 SF lease at 5301 Alliance Gateway with Brookfield Properties.
•
14.0% 12.0%
DrinkPak has signed a 1,250,743 SF lease at 35 – Eagle Building C with Trammell Crow Company.
•
•
VITAL STATS
vs. 12 Mths Ago
Q4 Leasing Activity
•
CURRENT EVENTS
These bright spots within the market help to soften the fact that North Fort Worth has surpassed an 11% vacancy rate for the first time since Q2 2021. However, the reality is that North Fort Worth delivered another 4.4M SF of new product in Q4, bringing the annual total to a staggering 16.1M SF of deliveries and has yet another 7M SF currently under construction. The majority of the construction activity, both deliveries and projects currently under construction have been in the Alliance sector which accounts for roughly 70% of the 7M SF still under construction. Fortunately, HLC has been given no indication or cause for concern as to the overall vitality of the submarket’s leasing activity and continued positive absorption. These factors coupled with the fact that the submarket only saw two new construction starts within the calendar year of 2023, tells us that North Fort Worth is poised to be able to stabilize the vacancy rate to historical averages over the next 12 months and continue to grow rental rates across the board.
**HLC submarket absorption stats are recorded in real time and do not align with Costar quarterly stats, as Costar is, in some instances 60-90 days behind real time transactions.
EXPERTS GEORGE JENNINGS
MATT CARTHEY
Vice President gjennings@holtlunsford.com 817.632.6151
Managing Principal, Partner mcarthey@holtlunsford.com 817.710.1111
18 Q4 2023 DFW INDUSTRIAL MARKET REPORT
SUBMARKET INTELLIGENCE
SOUTH FORT WORTH
CURRENT EVENTS The South Fort Worth industrial submarket continues to have strong leasing activity across all product types. Vacancy rates have stayed between 5% and 7% since Q4 2022 with approximately 5.9M SF delivering during that time period, a trend that kept up in Q4 2023 with 1.37M SF of new deliveries and ~1M SF in absorption. We believe the vacancy rate will ultimately drop in the second half of 2024, given the slowdown in speculative development. Only two projects totaling 381K SF broke ground in Q4 2023. Specifically, this pipeline consists of the Falcon Development single 237K SF rearload dubbed “Oak Creek Distribution” and Empire Equities four (4) building 144K SF single tenant grade level concept at Campus Park.
Q4 Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
992,855
496,384
1,967,706
vs. Prev. Qtr
vs. 12 Mths Ago
7.1%
7.1%
6.0%
8.0%
Q4 Leasing Activity
vs. Prev. Qtr
vs. 12 Mths Ago
6.0%
1,074,091
1,607,305
1,432,982
4.0%
Q4 U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
3,336,983
4,708,197
5,587,143
Q4 Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,371,214
1,424,256
254,265
1,500,000 1,000,000
Vice President tgrafton@holtlunsford.com 817.632.6152
Managing Principal, Partner mcarthey@holtlunsford.com 817.710.1111
500,000
2.0%
0
0.0%
-500,000 Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
ABSORPTION
Q1 22
Q2 22
Q3 22
Q4 22
DELIVERIES
Q1 23
Q2 23
Q3 23
Q4 23
VACANCY
NEW DEVELOPMENTS
Drinkpak has signed a 1,403,152 SF lease at Carter Park East with Clarion and Crow Holdings.
•
Carter Park East – a 1,403,152 SF BTS development with Clarion and Crow Holdings
•
Lineage Logistics has signed a 122,500 SF renewal at Carter Park Distribution with TA Realty.
•
Everman Park – a 1,014,905 SF BTS development with TCRG Properties
•
US Auto Force has signed a 114K SF lease at Chisholm 20 with Jackson Shaw.
•
Risinger Park South – a 655,500 SF development with TCRG Properties
•
Shearer Supply has signed a 34,430 SF lease at Everman Trade Center with Cabot Properties.
•
Point South Commerce – a 258,100 SF development with Alliance Industrial
•
Oak Creek Distribution Center – a 237,600 SF development with Falcon Commercial Development
DEALS IN THE MARKET
MATT CARTHEY
2,000,000
•
HLC DEAL
THOMAS GRAFTON
2,500,000
Q4 Vacancy
HLC DEAL
EXPERTS
3,000,000
10.0%
TOP LEASE TRANSACTIONS **HLC submarket absorption stats are recorded in real time and do not align with Costar quarterly stats, as Costar is, in some instances, 60-90 days behind real time transactions.
VITAL STATS 12.0%
•
Oak Creek Distribution Center – a 238,289 SF one (1) building portfolio
•
Campus Industrial Park – a 150,538 SF five (5) building project with Empire Holdings
•
7901 South Freeway – a 219,401 SF one (1) building portfolio
•
Junction 20-35 – a 139,496 SF development with CIM Group
•
1900 SE Loop 820 – a 225K SF one (1) building portfolio
LARGE EXISTING VACANCIES •
Majestic Fort Worth South | Building 10 – 781,530 SF
•
Carter Park East | Phase 2 Building 2 - 193,633 SF
•
Carter Park East | Phase 2 Building 3 - 193,633 SF
•
South Fort Worth Commerce Center | Building 1 – 180,556 SF
•
Carter Park East | Phase 2 Building 1 - 171,303 SF
•
Majestic Fort Worth South | Building 6 – 91,077 SF
DALLAS 5950 Berkshire Lane, Suite 900 Dallas, Texas 75225 T 972.241.8300 | F 972.241.7955
FORT WORTH 1200 Summit Avenue, Suite 300 Fort Worth, Texas 76102 T 817.710.1110 | F 817.810.9017
www.holtlunsford.com